What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-10-30 compared with 2024-07-25 · 95 added, 82 removed, 229 unchanged (44% of the section changed)

1 unchanged sentence

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide information to assist you in better understanding and evaluating our financial condition and results of operations.

We encourage you to read this MD&A in conjunction with our unaudited consolidated financial statements and the notes thereto for the period ended June 30, 2024 included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

We encourage you to read this MD&A in conjunction with our unaudited consolidated financial statements and the notes thereto for the period ended September 30, 2024 included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

This discussion contains forward-looking statements that involve risks and uncertainties.

14 unchanged sentences

We also have a CE certificate to market Optune Gio for the treatment of GBM in the European Union ("EU"), as well as approval or local registration in the United Kingdom ("UK"), Japan, Canada and certain other countries.

Optune Lua is approved by the FDA under the Humanitarian Device Exemption ("HDE") pathway to treat malignant pleural mesothelioma and pleural mesothelioma (together, "MPM") together with standard chemotherapies.

We have also received CE certification in the EU and approval or local registration to market Optune Lua in certain other countries.

Optune Lua is approved by the FDA under the PMA pathway for the treatment of adult patients with metastatic non-small cell lung cancer ("NSCLC") concurrent with PD-1/PD-L1 inhibitors or docetaxel following progression on or after a platinum-based regimen and under the Humanitarian Device Exemption ("HDE") pathway to treat malignant pleural mesothelioma and pleural mesothelioma (together, "MPM") together with standard chemotherapies.

We have also received CE certification in the EU and approval or local registration to market Optune Lua in certain other countries for the treatment of MPM.

We market Optune Gio and Optune Lua in multiple countries around the globe with the majority of our revenues coming from the use of Optune Gio in the U.S., Germany, France and Japan.

2 unchanged sentences

We are focusing our research and development activities in areas of greatest anticipated value creation.

This includes non-small cell lung cancer, brain cancers, and pancreatic cancer.

In 2023, we announced results from our phase 3 LUNAR study evaluating the use of TTFields together with standard therapies following platinum-based treatment failure in the treatment of patients with metastatic non-small cell lung cancer ("NSCLC").

Patients treated with TTFields therapy and standard therapies demonstrated a statistically significant and clinically meaningful improvement in overall survival over standard therapies alone.

The LUNAR study also showed a statistically significant and clinically meaningful improvement in overall survival when patients were treated with TTFields therapy and immune checkpoint inhibitors, as compared to those treated with immune checkpoint inhibitors alone, and a positive trend in overall survival when patients were treated with TTFields therapy and docetaxel versus docetaxel alone.

In December 2023, we filed a PMA application with the FDA seeking approval for the use of TTFields therapy together with standard systemic therapies for the treatment of NSCLC following progression on or after platinum-based therapy.

In January 2024, we announced the FDA had accepted this submission for filing.

We completed the Day 100 meeting with the U.S.

FDA regarding the PMA

application submission for Optune Lua in NSCLC based off of the LUNAR phase 3 clinical study.

The FDA Day 100 meeting conversation was productive with no indication that the LUNAR PMA is tracking for an advisory panel.

We anticipate the PMA decision in the second half of 2024.

This includes NSCLC, brain cancers, and pancreatic cancer.

In October 2024, the U.S.

FDA approved our PMA application for Optune Lua use concurrent use with PD-1/PD-L1 inhibitors or docetaxel for the treatment of adult patients with metastatic NSCLC who have progressed on or after a platinum-based regimen.

This application was based on the results from the phase 3 LUNAR trial, which showed patients treated with TTFields therapy concomitant with PD-1/PD-L1 inhibitors or docetaxel exhibited a statistically significant and clinically meaningful improvement in median overall survival (OS) compared to patients treated with PD-1/PD-L1 inhibitors or docetaxel alone.

The LUNAR trial included two pre-specified powered secondary endpoints.

The first secondary endpoint, which met statistical significance, assessed median OS in patients treated with Optune Lua concurrently with a PD-1/PD-L1 inhibitor versus a PD-1/PD-L1 inhibitor alone.

The second secondary endpoint, which showed a positive trend but did not meet statistical significance, assessed Optune Lua

concurrently with docetaxel versus docetaxel alone.

We have also filed applications for use to the necessary regulatory bodies in Europe and Japan.

4 unchanged sentences

These data are expected to serve as the basis for regulatory submissions.

In June 2024, we also presented top-line results from the prospective, non-interventional TIGER study at the 2024 ASCO annual meeting.

In October 2024, the FDA granted Breakthrough Device designation for the use of our NovoTTF-200M device and supportive care for the treatment brain metastases from NSCLC as used in the METIS protocol.

The designation offers us an opportunity to interact with FDA experts throughout the premarket review phase and allows for prioritized review of regulatory submissions.

In June 2024, we presented top-line results from the prospective, non-interventional TIGER study at the 2024 ASCO annual meeting.

The TIGER study investigated the use of TTFields therapy in routine clinical use in the treatment of newly diagnosed GBM in Germany.

9 unchanged sentences

We have several ongoing or planned trials which will further explore the use of TTFields therapy in the treatment of NSCLC, pancreatic cancer, and primary brain cancer.

In addition to the recently completed METIS trial, our NSCLC program includes the phase 3 LUNAR-2 trial, which explores the use of TTFields therapy together with pembrolizumab and platinum-based chemotherapy as first-line treatment for metastatic NSCLC and the phase 2 LUNAR-4 trial, which evaluates the use of TTFields therapy together with an immune checkpoint inhibitor (ICI) following prior ICI treatment as a second-line treatment for metastatic NSCLC.

Alongside the LUNAR and METIS phase 3 trials, our NSCLC program includes the phase 3 LUNAR-2 trial, which explores the use of TTFields therapy together with pembrolizumab and platinum-based chemotherapy as first-line treatment for metastatic NSCLC and the phase 2 LUNAR-4 trial, which evaluates the use of TTFields therapy together with an immune checkpoint inhibitor (ICI) following prior ICI treatment as a second-line treatment for metastatic NSCLC.

LUNAR-2 and LUNAR-4 are currently open and enrolling.

Finally, our phase 2 KEYNOTE B36 trial is exploring the use of TTFields therapy together with pembrolizumab for front-line treatment of locally advanced or metastatic NSCLC.

2 unchanged sentences

The PANOVA-3 trial is exploring the use of TTFields therapy together with nab-paclitaxel and gemcitabine as front-line treatment for unresectable locally advanced pancreatic cancer and is fully enrolled with top-line data anticipated in the fourth quarter of 2024.

The PANOVA-4 trial is exploring the use of TTFields therapy together with atezolizumab, gemcitabine and nab-paclitaxel for the treatment of metastatic pancreatic cancer and is currently open and enrolling.

Our primary brain cancer clinical trial program includes the fully enrolled phase 3 TRIDENT trial and the planned KEYNOTE D58 trial.

The TRIDENT trial is exploring the use of TTFields therapy concomitant with radiation and chemotherapy for the treatment of newly diagnosed GBM and top-line data is anticipated in 2026.

The KEYNOTE D58 trial will evaluate the use of TTFields therapy together with temozolomide and pembrolizumab for the treatment of newly diagnosed GBM.

The table below presents the current status of the ongoing clinical trials in our pipeline and anticipated timing of data.

The PANOVA-4 trial is exploring the use of TTFields therapy together with atezolizumab, gemcitabine and nab-paclitaxel for the treatment of metastatic pancreatic cancer and has completed enrollment with data anticipated in 2026.

Our primary brain cancer clinical trial program includes the fully enrolled phase 3 TRIDENT trial and the phase 3 KEYNOTE D58 trial.

The TRIDENT trial is exploring the use of TTFields therapy concomitant with radiation and chemotherapy for the treatment of newly diagnosed GBM and data is anticipated in 2026.

The KEYNOTE D58 trial is evaluating the use of TTFields therapy together with temozolomide and pembrolizumab for the treatment of newly diagnosed GBM and we are initiating clinical sites.

We anticipate expanding our clinical pipeline over time to study the safety and efficacy of TTFields therapy for additional solid tumor indications and combinations with other cancer treatment modalities.The table below presents the current status of the ongoing clinical trials in our pipeline and anticipated timing of data.

Our therapy is delivered through a medical device and we continue to advance our Products with the intention to extend survival and maintain quality of life for patients.

1 unchanged sentence

One of these initiatives is the launch of new arrays, which are thinner, lighter and more flexible.

We have obtained a CE Mark and are rolling out our new arrays in multiple European countries.

We have obtained a CE Mark and rolled out our new arrays in multiple European countries.

We submitted the new arrays for regulatory approval in the U.S.

via a PMA supplement in 2023 and are awaiting a regulatory decision.

and Japan and are awaiting regulatory decisions.

In 2018, we granted Zai Lab (Shanghai) Co., Ltd.

2 unchanged sentences

For additional information, see Note 13 to the 2023 10-K.

In September 2024, we announced that our Chief Executive Officer (CEO), Asaf Danziger, will retire at year-end 2024 and Novocure’s Chief Financial Officer (CFO), Ashley Cordova, will succeed him as the company’s next CEO.

Danziger, who has served as CEO since 2002, will serve as Senior Advisor through 2026, and will continue to serve on Novocure’s Board of Directors.

These changes will become effective on January 1, 2025.

In addition, Mukund Paravasthu transitioned into the role of Chief Operating Officer, effective October 1, 2024.

In October 2024, we announced the appointment of Christoph Brackmann as our CFO, effective January 1, 2025.

Brackmann joined in October 2024 as a Senior Finance Advisor and will continue in that role until his appointment as CFO takes effect.

Prior to joining Novocure, Mr.

Brackmann served as Senior Vice President, Finance at Moderna Inc.

from October 2019 to June 2024.

During that time Mr.

Brackmann built out the finance team across FP&A, accounting, tax, treasury, procurement and business service centers to support Moderna’s scale-up.

Brackmann earned his Master of Business Administration from the SDA Bocconi School of Management in 2003 and holds a degree in Business and Economics from the University of Manheim.

We view our operations and manage our business in one operating segment.

For the three and six months ended June 30, 2024, our net revenues were $150.4 million and $288.9 million, respectively.

Our net loss for the three and six months ended June 30, 2024 was $33.4 million and $72.1 million, respectively..

As of June 30, 2024, we had an accumulated deficit of $1,057.6 million.

For the three and nine months ended September 30, 2024, our net revenues were $155.1 million and $444.0 million, respectively.

Our net loss for the three and nine months ended September 30, 2024 was $30.6 million and $102.7 million, respectively.

As of September 30, 2024, we had an accumulated deficit of $1,088.2 million.

Impact of Current Events

On October 7, 2023, the State of Israel was attacked by and subsequently declared war on Hamas.

On October 7, 2023, the State of Israel was attacked and is in a state of war.

As of the date of this filing, we believe that there is no immediate risk to our business facilities or operations.

24 unchanged sentences

Results of Operations

The following discussion provides an analysis of our results of operations and reasons for material changes therein for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023.

The following discussion provides an analysis of our results of operations and reasons for material changes therein for the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023.

The tables contained in this section report U.S.

1 unchanged sentence

The following table sets forth our consolidated statements of operations data:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

16 unchanged sentences

The following table details the share-based compensation expense included in costs and expenses:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

13 unchanged sentences

The following table includes certain commercial operating statistics for and as of the end of the periods presented.

September 30,

Operating statistics 2024 2023

8 unchanged sentences

Total 4,113 3,639

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

8 unchanged sentences

Total 1,586 1,467 4,863 4,519

Three and six months ended June 30, 2024 compared to three and six months ended June 30, 2023

Three months ended June 30, Six months ended June 30,

Three and nine months ended September 30, 2024 compared to three and nine months ended September 30, 2023

Three months ended September 30, Nine months ended September 30,

2024 2023 % Change 2024 2023 % Change

1 unchanged sentence

Net revenues.

Net revenues increased 19% to $150.4 million for the three months ending June 30, 2024 from $126.1 million for the same period in 2023.

For the three months and six months ended June 30, 2024, the increase primarily resulted from $14.3 million and $24.8 million of net revenues from the successful launch in France and $8.8 million and $14.1 million of net revenues in the U.S.

Net revenues increased 22% to $155.1 million for the three months ending September 30, 2024 from $127.3 million for the same period in 2023.

For the three and nine months ended September 30, 2024, the increase primarily resulted from $11.1 million and $35.8 million of net revenues from the successful launch in France and $12.1 million and $26.2 million of net revenues in the U.S.

due to improved approval rates.

The improved approval rates in the U.S.

resulted in $5.0 million and $9.2 million of increased net revenue from prior period claims during the three- and six- month periods, primarily from 2023.

In addition, we received $2.6 million in net revenues in the second quarter from a private payer in the United Kingdom where payments are not routine.

Three months ended June 30, Six months ended June 30,

resulted in $4.7 million and $14.0 million of increased net revenue from prior period claims during the three- and nine- month periods, primarily from 2023.

Three months ended September 30, Nine months ended September 30,

2024 2023 % Change 2024 2023 % Change

1 unchanged sentence

Cost of revenues.

Our cost of revenues for the three months ended June 30, 2024 was $34.7 million, an increase of 2% from $34.0 million for the same period in 2023.

For the three and six months ended June 30, 2024, the increase in cost of revenues was primarily due to 11% growth in active patients, partially offset by lower support personnel costs in the amount of $0.9 million and $0.8 million, respectively.

Excluding sales to Zai, cost of revenues per active patient per month was $2,692 for the three months ended June 30, 2024, a decrease of 6% from $2,878 for the same period in 2023, primarily due to decreased support personnel costs.

Our cost of revenues for the three months ended September 30, 2024 was $35.4 million, an increase of 10% from $32.1 million for the same period in 2023.

For the three and nine months ended September 30, 2024, the increase in cost of revenues was primarily due to 13% growth in active patients, partially offset by lower equipment sales to Zai in the amount of $1.5 million and $1.9 million, respectively.

Excluding sales to Zai, cost of revenues per active patient per month was $2,713 for the three months ended September 30, 2024, an increase of 4% from $2,599 for the same period in 2023, primarily due to an increase in

costs related to the rollout of our new arrays.

Cost of revenues per active patient is calculated by dividing the cost of revenues for the quarter less equipment sales to Zai for the quarter by the average of the active patients at the end of the prior quarter and the ending active patients in the current quarter.

1 unchanged sentence

Sales to Zai are deducted because they are sold at cost and in anticipation of future royalties from Zai, and Zai patient counts are not included in our active patient population.

Product sales to Zai totaled $3.1 million and $5.9 million for the three and six months ended June 30, 2024 compared to $3.6 million and $6.3 million for the three and six months ended June 30, 2023.

Gross margin was 77% for the three months ended June 30, 2024 compared to 73% for the three months ended June 30, 2023.

We expect that our gross margins will continue to be impacted by current and future product enhancements, such as the ongoing launch of next generation arrays in the U.S.

and our potential launch in NSCLC.

Product sales to Zai totaled $2.5 million and $8.4 million for the three and nine months ended September 30, 2024 compared to $4.0 million and $10.3 million for the three and nine months ended September 30, 2023.

Gross margin was 77% for the three months ended September 30, 2024 compared to 75% for the three months ended September 30, 2023.

The improvement in gross margin is due to the increase in net revenue per patient primarily attributed to our improved approval rates in the US and successful launch in France.

We expect that our gross margins will be impacted by current and future product enhancements, such as the launch of our new arrays in the U.S.

and our launch in NSCLC.

We continue to focus on opportunities to increase efficiencies and scale within our supply chain.

1 unchanged sentence

Operating Expenses.

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2024 2023 % Change 2024 2023 % Change

4 unchanged sentences

Research, development and clinical study expenses.

Research, development and clinical study expenses decreased 1% to $55.0 million for the three months ended June 30, 2024 from $55.4 million for the same period in 2023.

For the three months ended June 30, 2024, the change was de minimis.

For the six months ended June 30, 2024, the change resulted primarily from $5.6 million in decreased personnel expenses.

Research, development and clinical study expenses decreased 3% to $51.9 million for the three months ended September 30, 2024 from $53.6 million for the same period in 2023.

For the three and nine months ended September 30, 2024, the change was primarily due to a decrease in personnel expenses.

Total research and development expenses can fluctuate quarter-to-quarter dependent upon the amount of clinical research organization services delivered, clinical materials procured and the number of trials actively underway within a given quarter.

Sales and marketing expenses.

Sales and marketing expenses decreased 3% to $56.6 million for the three months ended June 30, 2024 from $58.5 million for the same period in 2023.

For the three months ended June 30, 2024, these changes were primarily driven by a $4.2 million reduction in marketing and health policy spend attributed to lower personnel costs and $1.2 million less in medical grants, partially offset by a $3.5 million increase in sales costs related to a sales force expansion in anticipation of a potential launch in NSCLC.

For the six months ended June 30, 2024, the increase was driven by a $5.2 million increase related to the sales force expansion for NSCLC, partially offset by $3.7 million reduction in other personnel expenses.

Sales and marketing expenses increased 3% to $59.8 million for the three months ended September 30, 2024 from $58.0 million for the same period in 2023.

For the three months ended September 30, 2024, the change was primarily driven by an $7.8 million increase in costs related to a sales force expansion in anticipation of a potential launch in NSCLC, partially offset by a $6.2 million reduction in marketing spend.

For the nine months ended September 30, 2024, the increase was primarily driven by a $10.8 million increase related to the sales force expansion for NSCLC, partially offset by a $6.7 million reduction in marketing spend.

General and administrative expenses.

General and administrative expenses decreased 8% to $37.7 million for the three-month period ended June 30, 2024 from $40.8 million for the same period in 2023.

For the three and six months ended June 30, 2024, these changes were primarily due to lower personnel expenses.

Three months ended June 30, Six months ended June 30,

General and administrative expenses decreased 4% to $40.1 million for the three-month period ended September 30, 2024 from $41.9 million for the same period in 2023.

For the three and nine months ended September 30, 2024, these changes were primarily due to lower personnel and professional service expenses.

Three months ended September 30, Nine months ended September 30,

2024 2023 % Change 2024 2023 % Change

1 unchanged sentence

Financial income (expenses), net.

For the three months ended June 30, 2024, financial income increased $2.1 million or 24% to $10.9 million from $8.8 million for the same period in 2023, primarily due to $2.2 million higher interest income offset by $2.0 million interest expenses related to the senior secured credit facility (see "Senior Secured Term Loan Credit Facility" below), $1.1 million in gain from redemptions of our 0% Convertible Senior Notes due 2025 (the “Notes”) and $0.9 million in favorable foreign exchange adjustments.

Financial income increased $2.8 million or 16%, to $20.7 million for the six months ended June 30, 2024 from $17.9 million in income for the same period in 2023, primarily due to $2.2 million in higher interest income.

Three months ended June 30, Six months ended June 30,

For the three months ended September 30, 2024, financial income increased $0.5 million or 5% to $10.5 million from $10.0 million for the same period in 2023, primarily due to $0.8 million higher interest income and $3.5 million in favorable foreign exchange adjustments, offset by $3.0 million in interest expenses related to the senior secured credit facility (see "Senior Secured Term Loan Credit Facility" below).

Financial income increased $3.3 million or 12%, to $31.2 million for the nine months ended September 30, 2024

from $27.9 million in income for the same period in 2023, primarily due to $5.0 million in higher interest income, $2.3 million in favorable foreign exchange impact and $1.1 million in gain from redemption of the Notes, offset by $4.9 million in interest expenses related to the senior secured credit facility.

Three months ended September 30, Nine months ended September 30,

2024 2023 % Change 2024 2023 % Change

1 unchanged sentence

Income taxes .

Income taxes increased 203% to $10.6 million for the three months ended June 30, 2024 from $3.5 million for the same period in 2023, and increased 223% to $17.8 million for the six months ended June 30, 2024 from $5.5 million for the same period in 2023.

The change is driven by a decrease in tax benefits from share-based compensation and the utilization of tax credits in 2023 related to prior years.

The increase also reflects a change in the mix of applicable statutory tax rates in active jurisdictions.

Income taxes increased 611% to $9.0 million for the three months ended September 30, 2024 from $1.3 million for the same period in 2023 primarily due to $5.6 million resulting from the utilization of tax credits in 2023 related to prior years and a change in the mix of applicable statutory tax rates.

Income taxes increased 296% to $26.7 million for the nine months ended September 30, 2024 from $6.8 million for the same period in 2023 primarily due to a $7.3 million decrease in tax benefits from share-based compensation, $5.2 million resulting from the utilization of tax credits in 2023 related to prior years and a change in the mix of applicable statutory tax rates.

Non-GAAP financial measures

We also measure our performance using a non-GAAP measurement of earnings before interest, taxes, depreciation, amortization and shared-based compensation (“Adjusted EBITDA”).

We believe Adjusted EBITDA is

useful to investors in evaluating our operating performance because it helps investors evaluate and compare the results of our operations from period to period by removing the impact of earnings attributable to our capital structure, tax rate and material non-cash items, specifically share-based compensation.

We believe Adjusted EBITDA is useful to investors in evaluating our operating performance because it helps investors evaluate and compare the results of our operations from period to period by removing the impact of earnings attributable to our capital structure, tax rate and material non-cash items, specifically share-based compensation.

We calculate Adjusted EBITDA as operating income before financial expenses and income taxes, net of depreciation, amortization and share-based compensation.

The following table reconciles net income (loss), which is the most directly comparable GAAP operating performance measure, to Adjusted EBITDA.

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2024 2023 % Change 2024 2023 % Change

6 unchanged sentences

Adjusted EBITDA $ 1,730 $ (29,096) (106) % $ (1,783) $ (74,738) (98) %

Adjusted EBITDA increased by $28.3 million to $1.1 million for the three months ended June 30, 2024 from $(27.2) million for the same period in 2023.

This increase was primarily driven by revenue growth from improved approval rates in the U.S., a successful launch in France, and a benefit from prior period claims in the U.S.

The revenue increase resulted in a $23.7 million increase in gross margin.

Actions taken during the November 2023 restructuring and a heightened focus on driving operational efficiencies reduced total operating expenses, excluding share-based compensation, by $4.1 million year-over-year.

Adjusted EBITDA increased by $30.8 million to $1.7 million for the three months ended September 30, 2024 from $(29.1) million for the same period in 2023.

This increase was primarily driven by revenue growth from improved approval rates in the U.S.

and a successful launch in France.

The revenue increase drove a $24.5 million increase in gross profit.

Actions taken during the November 2023 restructuring and a heightened focus on operational efficiencies reduced total operating expenses, excluding share-based compensation, by $6.3 million year-over-year.

We intend to take actions that prioritize growth and maintain financial health and flexibility as we position our company for future profitability.

1 unchanged sentence

We have incurred significant losses and cumulative negative cash flows from operations since our founding in 2000.

As of June 30, 2024, we had an accumulated deficit of $1,057.6 million.

As of September 30, 2024, we had an accumulated deficit of $1,088.2 million.

To date, we have primarily financed our operations through the issuance and sale of equity and the proceeds from long-term loans.

At June 30, 2024, we had $951.2 million in cash, cash equivalents and short-term investments, an increase of $40.6 million compared to $910.6 million at December 31, 2023, primarily as a result of the $100 million draw down of the first tranche of our senior secured credit facility in May 2024 (see "Senior Secured Term Loan Credit Facility" below), offset by net cash used in operations and used in investing activities.

We believe our cash, cash equivalents and short-term investments as of June 30, 2024 are sufficient for our operations for at least the next 12 months based on our existing business plan and our ability to control the timing of significant expense commitments.

At September 30, 2024, we had $959.9 million in cash, cash equivalents and short-term investments, an increase of $49.3 million compared to $910.6 million at December 31, 2023, primarily as a result of the $100 million draw down of the first tranche of our senior secured credit facility in May 2024 (see "Senior Secured Term Loan Credit Facility" below), offset by net cash used in operations and used in investing activities.

We believe our cash, cash equivalents and short-term investments as of September 30, 2024 are sufficient for our operations for at least the next 12

months based on our existing business plan and our ability to control the timing of significant expense commitments.

We expect that our operating expenses will continue to increase over the next several years and may outpace our gross profit as we prepare to expand into additional indications beyond GBM.

1 unchanged sentence

The following summary of our cash flows for the periods indicated has been derived from our unaudited consolidated financial statements, which are included elsewhere in this Quarterly Report:

Six months ended June 30,

Nine months ended September 30,

2024 2023 Change % Change

7 unchanged sentences

Operating cash flows are also impacted by changes in working capital.

Net cash used in operating activities decreased by $6.2 million from $39.5 million net cash used in operating activities for the six months ended June 30, 2023 to $33.3 million net cash used in operating activities for the six months ended June 30, 2024.

This was a result of a $38.3 million reduction in net loss, offset by a $32.9 million increase in working capital primarily driven by a $35.8 million increase in accounts receivable, a decrease of $7.1 million in cash to non-cash based expenses primarily consisting of shared-based compensation, and a decrease of $7.8 million in other long term assets and liabilities.

Net cash used in operating activities decreased by $35.9 million from $58.8 million net cash used in operating activities for the nine months ended September 30, 2023 to $22.9 million net cash used in operating activities for the nine months ended September 30, 2024.

This was a result of a $57.3 million reduction in net loss, offset by a $22.9 million increase in working capital primarily driven by a $33.1 million increase in accounts receivable and a $7.4 million decrease of inventories, a decrease of $6.0 million in cash to non-cash based expenses primarily consisting of shared-based compensation, and a decrease of $4.4 million in other long term assets and an increase of $2.8 million in other long-term liabilities.

Investing activities.

Our investing activities consist primarily of investments in and redemptions of our short-term investments as well as investments in property and equipment.

Net cash used in investing activities was $128.2 million for the six months ended June 30, 2024, compared to $68.4 million provided by investing activities for the six months ended June 30, 2023.

The $128.2 million net cash used in investing activities for the six months ended June 30, 2024 was primarily attributable to $105.0 million of the net purchase of short term investments and the purchase of $23.2 million of property and equipment.

The $68.4 million net cash provided by investing activities for the six months ended June 30, 2023 was primarily attributable to $81.4 million of net proceeds from maturity of short term investments and by the purchase of $13.0 million of property and equipment.

Net cash used in investing activities was $118.0 million for the nine months ended September 30, 2024, compared to $85.6 million provided by investing activities for the nine months ended September 30, 2023.

The $118.0 million net cash used in investing activities for the nine months ended September 30, 2024 was primarily attributable to $84.1 million of the net purchase of short term investments and the purchase of $33.9 million of property and equipment.

The $85.6 million net cash provided by investing activities for the nine months ended September 30, 2023 was primarily attributable to $105.9 million of net proceeds from maturity of short term investments and by the purchase of $20.3 million of property and equipment.

Financing activities.

Net cash provided by financing activities was $87.5 million for the six months ended June 30, 2024, as compared to $12.7 million provided by financing activities for the six months ended June 30, 2023, primarily attributable to $96.9 million of net proceeds from the first tranche of our senior secured credit facility offset by $12.9 million used to partially repay Notes, In addition, the net cash provided by financing activities for the six months ended June 30, 2024 and June 30, 2023 included proceeds from the exercise of options under the Company's stock option plan.

Net cash provided by financing activities was $87.6 million for the nine months ended September 30, 2024, as compared to $13.9 million provided by financing activities for the nine months ended September 30, 2023, primarily attributable to $96.9 million of net proceeds from the first tranche of our senior secured credit facility offset by $12.9 million used to partially repay Notes, In addition, the net cash provided by financing activities for the nine months ended September 30, 2024 and September 30, 2023 included proceeds from the exercise of options under the Company's share option plan.

Convertible Notes

4 unchanged sentences

The Notes are convertible at the option of the holders upon the satisfaction of certain other conditions and during certain periods, and if the Company exercises its right to redeem the Notes as permitted or required by the indenture.

On or after August 1, 2025 until the close of the business on the business day immediately preceding the maturity date, holders may convert all or any portion of their Notes at the conversion rate at any time irrespective of the foregoing conditions.

On or after August 1, 2025 until the close of the business on the business day immediately preceding the

maturity date, holders may convert all or any portion of their Notes at the conversion rate at any time irrespective of the foregoing conditions.

In January 2021, we irrevocably elected to settle all conversions of Notes by a combination of cash and our ordinary shares and that the cash portion per $1,000 principal amount of Notes for all conversion settlements shall be $1,000.

Accordingly, from and after the date of the election, upon conversion of any Notes, holders of Notes will

receive, with respect to each $1,000 principal amount of Notes converted, cash in an amount up to $1,000 and the balance of the conversion value, if any, in our ordinary shares.

Accordingly, from and after the date of the election, upon conversion of any Notes, holders of Notes will receive, with respect to each $1,000 principal amount of Notes converted, cash in an amount up to $1,000 and the balance of the conversion value, if any, in our ordinary shares.

For more information, see Note 10a.

26 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis